Analyzing Small-Cap Value ETFs: ISCV vs. IWN
Both funds focus on small and medium-sized U.S. companies that are considered undervalued compared to the broader market. The iShares Morningstar Small Cap Value ETF (ISCV +0.93%) offers a more cost-effective entry into small-cap value investing than the iShares Russell 2000 Value ETF (IWN +1.49%).
Snapshots (Cost and Size)
| Metric | ISCV | IWN |
|---|---|---|
| Publisher | iShares | iShares |
| Expense Ratio | 0.06% | 0.24% |
| 1-Year Return (as of June 19, 2026) | 30.01% | 43.66% |
| Dividend Yield | 1.88% | 1.45% |
| Beta | 1.08 | 1.12 |
| Assets Under Management | $658.8 million | $14 billion |
Note: Beta indicates price volatility relative to the S&P 500 and is based on five years of monthly returns. The one-year return is the expected total return for the upcoming 12 months, while the dividend yield represents trailing distributions over the last 12 months.
ISCV is more affordable, with an expense ratio of just 0.06%, especially when compared to IWN’s 0.24%. On top of that, ISCV also offers a more attractive dividend yield at 1.88% versus IWN’s 1.45%.
Comparing Performance and Risk
| Metric | ISCV | IWN |
|---|---|---|
| Maximum Drawdown (5 years) | (25.34%) | (26.70%) |
| $1,000 Growth in 5 Years (Total Return) | $1,442 | $1,437 |
Established in 2000, IWN strives to give exposure to the value sector within the Russell 2000 Index. It holds 1,382 stocks across various sectors, such as financial services (23.9%), industrial products (12.1%), and technology (11.6%). Key holdings include: TTM Technologies (TTMI +6.83%), and Hut 8 (HUT +4.59%).
On the flip side, ISCV tracks a different index and contains about 1,060 stocks. Its sector distribution leans heavily toward financial services (20.7%), consumer cyclical (13.5%), and industrial (12.7%). Notable positions are: TD Synnex (SNX +0.21%) and Moderna (mRNA +3.50%).
What This Means for Investors
Small-cap value stocks have historically been significant in long-term investment strategies. Research shows that smaller companies with lower valuations often outperform larger counterparts across market cycles, despite some volatility.
One clear takeaway when looking at these two funds is ISCV’s expense ratio of 0.06%, which stands in stark contrast to IWN’s 0.24%. This cost difference can accumulate over time, greatly impacting net returns, especially for long-term, buy-and-hold investors seeking to minimize fees. Additionally, ISCV delivers better dividend yields.
While both funds share similarities in terms of maximum drawdown and performance over the past five years, they both highlight an often underestimated segment of the market. In a landscape where high valuations are common in many growth sectors, shifting some focus toward undervalued small-cap stocks could be a clever diversification strategy for investors willing to take a longer view.
